Bruce Power Supplier Forum Safely Secure our Future
September 21, 2018
Confidential 1 Welcome – Today’s Agenda
Agenda Item Responsible Time Registration and Coffee / Networking All 8:00 - 9:00 Welcome and Safety Moment Richard Horrobin, VP & MD, Supply Chain 9:00 - 9:10 Introduction / Kick off Richard Horrobin, VP & MD, Supply Chain 9:10 - 9:20
Brue Power State of the Nation • Opening comments Mike Rencheck, President & CEO • Operational update Len Clewett, EVP & CNO 9:20 - 10:10 • Projects overview Kelly Trice, EVP, Projects & Field Services • 2019-2021 Business Plan John Soini, EVP, Finance & Commercial Services
Procurement Outlook Richard Horrobin, VP, Supply Chain 10:10 - 10:30 Achieving Performance Excellence Supplier Relations and Scorecards John Soini, EVP, Finance & Commercial Services 10:30 - 10:50 Addressing your Feedback Localisation and Our New Indigenous Richard Horrobin, VP & MD, Supply Chain 10:50 - 11:10 Procurement Policy Supplier Code of Conduct John Kain, DM, Code of Conduct 11:10 - 11:25 Industry Update John Peevers, DM, Communications 11:25 - 11:40 Morning Wrap-Up – Instructions for the Afternoon Richard Horrobin, VP & MD, Supply Chain 11:40 - 11:45 Lunch and Networking All 11:45 - 12:45 Golf – 9 holes; Shotgun start All 1:00 - 3:30 Wrap-up and Closing Comments Mike Rencheck, President & CEO 3:45 - 4:15
Confidential 2 Safety Information
• Safety Moment
• Logistics • Medical, Fire or Police emergency – call 911 • First Aid Responders • Fire alarms – nearest exit, assemble in parking lot • Washrooms
Confidential 3 Confidential 4 Project Performance: Safety, Quality, Cost and Schedule
Mike Rencheck, President and CEO
Confidential 5 Project Performance
1. Project Leadership - No substitute
• The leadership of a project matters – mindset, attitude, and organizational culture across the team and its contractors • PMI processes and standards are needed but too often a crutch for good leadership, engagement and decision making. • Creating the Team • Purpose, identity, and culture. • Aligning incentives through consistent performance and metrics. • “Ownership mind-set among all team members, ensure timely decision-making, and proactively manage performance using leading indicators.”
Confidential 6 Project Performance
2. Safety and Productivity are the same go hand-in-hand
• Build a culture of excellence – safety, quality, schedule and cost are all required to perform to standards. • Shaping and enforcing behavior and mind-sets on project teams • Training and role modelling to instill values • Re-enforcement of standards – • Site signage • Productivity-promotion - productivity hotline, suggestion cards, celebrations of success stories, and a rewards program.
Confidential 7 Project Performance
3. Ownership – a partnership between owner and suppliers
• We are in this together – a 25 year Life Extension program with a 15 year MCR project critical path. • Relationships – performance is the key and all topics are on the table. • Strategic partners – pooling and long term contracts, innovation pilots or continuous improvement programs
Confidential 8 Project Performance
4. Integrated Project Team
• One Team - A unified project organization. • Collaborative and Supplier, owner, contractor act as one • Schedules - • Alignment - Key tasks • Issues – team communicates and solves quickly • Project Leaders – “establish the culture, direction, and systems that enable the team to work effectively—not as masterminds who delegate tasks and instructions top down.”
Confidential 9
Project Performance
5. Continuous Improvement
• Metrics: Project Improvement (PI) • Partners • Improve project value through innovations, ideas, optimizations in techniques or schedule execution, productivity, or scope control. • Reviewed continuously— by the IPT —throughout the project. • Outcome - significantly increase the predictably and reduce risk for a successful delivery.
Confidential 10 Project Performance
6. Project Control Center
• Integrate all aspects of project performance – safety, quality, schedule and cost • Ownership - being responsible and accountable for performance and results. • War Room Mentality- “strict meeting structure to establish a daily project cadence and facilitate rapid issue detection and resolution.” • Collaborative project culture • “ensuring transparent and early reporting of issues.” • “finding solutions rather than assigning blame” • COMMON TOOL SET - P6 and/or Ecosys
Confidential 11 Operational Update
Len Clewett, EVP and CNO
Confidential 12 Safety
• Safety Pillars • Safety Culture • -
Confidential 13 Quality
• Preparation • Execution • Learning
Confidential 14 Cost and Schedule
• 291 Outage Days in 2019 • New Equipment Performance Division • Excellence - Safety and cost are strongly correlated
Confidential 15 Projects Update
Kelly Trice, EVP Projects & Field Services
Confidential 16 Understanding Our Business Model and 2019-2021 Business Outlook
John Soini, EVP Finance & Commercial Services
Confidential 17 Our Business Model
6 Year Cycle
3 Year Plan
1 Year Performance
Confidential 18 Procurement Calendar Outlook
Richard Horrobin, VP and Managing Director, Supply Chain
Confidential 19 Procurement Calendar Outlook
Significant Procurements accepting Proposals • Engineering MATOC • BP – OPG Transformers Collaborative Procurement • Heat Exchanger Field Services • Laundry Services
Significant Upcoming Procurements • Extended West Shift Plus Execution • Protective Relays (Detailed Design, Equipment) • Valve Services • Training Services • Fire Protection Bruce A & B
Confidential 20 Procurement Calendar Outlook (www.brucepower.com)
Confidential 21 Supplier Relations and Scorecards Addressing Your Feedback
John Soini, EVP Finance & Commercial Services
Confidential 22 Behavioural Attributes of Great Relationships
• Building: “Transparency is key, and taking accountability…Removing the us vs. them mentality is helping”. • Breaking: “Playing the blame game. Unwillingness to truly understand the process and implement solutions”. *Drawn from feedback from 90 supplier representatives.
Confidential 23 Program Results – Examples of Observed Performance Trends 2017 - 2018 Supplier Performance Summary Supplier Name Area September October November December January February March April May June Safety 100%(11/11) 100%(11/11) 100%(11/11) 90%(9/10) 100%(7/7) 100%(11/11) 100%(10/10) 100%(11/11) 92%(11/12) 100%(12/12) Quality 91%(10/11) 91%(10/11) 100%(11/11) 100%(10/10) 100%(7/7) 91%(10/11) 90%(9/10) 82%(9/11) 100%(12/12) 100%(12/12) Cost 90%(10/11) 82%(9/11) 90%(10/11) 100%(10/10) 100%(7/7) 100%(11/11) 100%(10/10) 100%(11/11) 100%(12/12) 100%(12/12)
Supplier 1 Supplier Schedule 82%(9/11) 91%(10/11) 81%(9/11) 80%(8/10) 86%(6/7) 91%(10/11) 90%(9/10) 91%(10/11) 83%(10/12) 92%(11/12)
Safety 100%(5/5) 100%(5/5) 100%(5/5) 100%(5/5) 100%(3/3) 100%(3/3) 100%(3/3) 100%(3/3) 100%(2/2) 100%(2/2) Quality 100%(5/5) 100%(5/5) 100%(5/5) 100%(5/5) 100%(3/3) 100%(3/3) 100%(3/3) 100%(3/3) 100%(2/2) 100%(2/2) Cost 100%(5/5) 100%(5/5) 100%(5/5) 100%(5/5) 100%(3/3) 100%(3/3) 100%(3/3) 100%(3/3) 100%(2/2) 100%(2/2)
Supplier 2 Supplier Schedule 100%(5/5) 100%(5/5) 100%(5/5) 100%(5/5) 100%(3/3) 100%(3/3) 100%(3/3) 100%(3/3) 100%(2/2) 100%(2/2) Safety 100%(13/13) 100%(13/13) 100%(13/13) 100%(13/13) 100%(13/13) 100%(13/13) 100%(13/13) 100%(14/14) 100%(14/14) 100%(14/14) Quality 100%(13/13) 100%(13/13) 100%(13/13) 100%(13/13) 100%(13/13) 100%(13/13) 100%(13/13) 100%(14/14) 100%(14/14) 100%(14/14) Cost 85%(11/13) 85%(11/13) 92%(12/13) 92%(12/13) 100%(13/13) 92%(12/13) 100%(13/13) 100%(14/14) 100%(14/14) 100%(14/14)
Supplier 3 Supplier Schedule 62%(8/13) 77%(10/13) 84%(11/13) 85%(11/13) 77%(10/13) 85%(11/13) 85%(11/13) 100%(14/14) 100%(14/14) 100%(14/14) Safety 100%(24/24) 100%(24/24) 100%(20/20) 100%(19/19) 100%(19/19) 100%(20/20) 100%(20/20) 100%(19/19) 100%(20/20) 100%(19/19) Quality 83%(20/24) 100%(24/24) 100%(20/20) 100%(19/19) 89%(17/19) 85%(17/20) 100%(20/20) 100%(19/19) 95%(19/20) 84%(16/19) Cost 96%(23/24) 88%(21/24) 95%(19/20) 95%(18/19) 84%(16/19) 80%(16/20) 75%(15/20) 63%(12/19) 65%(13/20) 95%(18/19)
Supplier 4 Supplier Schedule 88%(21/24) 88%(21/24) 85%(17/20) 79%(15/19) 63%(12/19) 65%(13/20) 80%(16/20) 74%(14/19) 70%(14/20) 84%(16/19)
Confidential 24 Improving Net Performance (but not 100%!)
Confidential 25 Supplier Survey Update - Background
• Focus Areas – Supplier perspectives on: • RFx processes • Contract / PO Execution • Communication and Support • Supplier Opportunity • Overall relationship and behaviours • Survey issued to 25 suppliers (March 1-28, 2018) • 82% confirmed response • Total of 544 comments submitted against focus areas. • Action plans set for top 5 themes.
Confidential 26 Supplier Survey – Next Steps
Feedback Action Plan • Simplify the process and eliminate duplication/redundant information Change order process is slow • Stakeholder and pilot with 2 supplier partners • Implement solution in Maximo • Construction Managed Task scope improvement team has been formed Scope of work is not always clear • Simplify and clarify Construction Managed Task scope process • Simplify and clarify main RFP templates • Continued emphasis on JMCs and SRMs Gap in organizational alignment • Ongoing presentations to supplier partners and project organizations Not receptive to innovation • Launched [email protected] suggestions • Project scope definition pilot with supplier partner • Continuing to pursue long-term and large awards through Category Not enough time to bid Management / Strategic Sourcing • Improve up-front project scheduling for commercial processes Follow-up survey in Spring 2019
Confidential 27 Localization and Bruce Power’s Indigenous Procurement Policy
Richard Horrobin, VP and Managing Director, Supply Chain
Confidential 28 Our Local Supply Chain – 2016 (10)
Confidential 29 Our Local Supply Chain – Today (36)
Confidential 30 Our Local Supply Chain – 2020?
Confidential 31 Bruce Power Indigenous Procurement Policy
Confidential 32 Supplier Code of Conduct
John Kain, Code of Conduct and Privacy Officer
Confidential 33
Trust takes years to build, seconds to break, and forever to repair.
Confidential 34 Ethical Culture
• What is an “Ethical Culture”? • An organizational culture where ethical values (integrity, respect, honesty, transparency, etc.) matter, as reflected in the actions of employees, company policy and procedures.
• The strength of a company’s ethical culture is the extent to which the organization makes doing the right thing a priority.
Confidential 35 Strong Culture = Less Misconduct & Better Reporting
*2018 Ethics and Compliance Initiative (Ethics.org)
Confidential 36 Strong Culture = Better Recruits
97% of MBAs surveyed* were willing to forgo financial benefits to work for a company with a better reputation for ethics and corporate social responsibility.
(Up to 14% of expected income)
*Source: CEB (now Gartner Inc.)
Confidential 37 Strong Culture = Better Performance
• Employees working for companies with strong ethical cultures are:
• 2.1 times more likely to over-perform on annual individual goals; and
• 2.7 times more likely to over-perform on annual team goals,when compared against employees working for companies with weak ethical cultures.
*Source: CEB (now Gartner Inc.)
Confidential 38 Other Positive Effects
• Companies who have strong ethical cultures tend to have: • more engaged employees who work harder (based on increased discretionary effort) • less turnover; • better safety performance; • higher productivity; and • better shareholder returns (based on publicly traded companies).
*Source: CEB (now Gartner Inc.)
Confidential 39 So how do you achieve and maintain a strong ethical culture?
Confidential 40 1) “Tone from the Top” Matters
• Actions – and perceptions – of top managers drive the ethical culture of the company and have a significant impact on outcomes.
• If top management culture is strong: • less misconduct is observed, • reporting of misconduct is increased, • employees report feeling less pressure to commit misconduct, and • retaliation for reporting misconduct is also reduced.
Confidential 41 2) Set Clear Expectations
• It is important that ethical expectations, and consequences of misconduct, are clearly communicated to employees.
• Everyone has a role in helping to set those expectations: both senior leaders and direct manager leadership.
• That is part of my role here today…
Confidential 42 Supplier Code of Conduct
Confidential 43 Supplier Code of Conduct
• Harassment, Discrimination and Workplace Violence • Human Rights and Diversity • Privacy and Confidential Information • Conflicts of Interest • Gifts and Hospitality • Anti-Corruption • Insider Trading • Business Reporting • Protecting Bruce Power Assets • Information Security • Social Media
Confidential 44 Back to First Principles
1. Conduct your business with integrity.
2. Treat the people with whom you do business with respect.
3. Do not engage in behaviour that is going to jeopardize the trust that Bruce Power has placed in you as a business partner.
Confidential 45 Post Election – Post Re-Licensing Outlook
John Peevers, Director, Corporate Communications
Confidential 46 Licence renewal
• 119 positive interventions including 48 positive oral presentations
Election Results
• PC- 76 seats; 40.64% of the popular vote • NDP- 40 seats; 33.69% of the popular vote • Liberal-7 seats; 19.3% of the popular vote • Green- 1 seat; 4.62% of the popular vote
Grey-Bruce-Owen Sound: Bill Walker
Huron-Bruce: Lisa Thompson For the people
• This election was not about who had the best vision for the province or which leader was the most premier- like. This election was not about the macro; it was all about the micro. • Voters wanted immediate relief, not big promises for the future. They wanted policy that would positively impact them now: – 10-cents/litre reduction in cost of gas – Relief from electricity rates – A solution to the ever-increasing tax burden What it means
• Government will be focused on helping people who are struggling. • Government will be extremely sensitive about undertaking any projects that harm the pocketbook or affect voters’ perceptions the PCs are there for the “little guy.” • Back to basics: providing tax relief for Ontarians, focusing on reducing the debt, and sticking to its knitting.
PC Policy Commitments - Energy
• Terminate the board of Hydro One and its CEO • Repeal the Green Energy Act • Reduce electricity rates by 12% for families, farmers, and small businesses (Cancel energy contracts in the pre- construction phase and re-negotiate other energy contracts. • Declare a moratorium on new energy contracts. • Eliminate enormous salaries at Ontario Power Generation and Hydro One. Ontario’s New Cabinet
Hon. Greg Rickford - Minister of Energy, Northern Development and Mines, and Minister of Indigenous Relations. Hon. Rod Phillips - Minister of the Environment, Conservation and Parks. Hon. Vic Fedeli - Minister of Finance & Chair of Cabinet. Hon. Peter Bethlenfalvy (MPP Pickering-Uxbridge) - President of the Treasury Board. Hon. Lisa Thompson (MPP Huron-Bruce) - Minister of Education. Hon. John Yakabuski (MPP Renfrew-Nipissing-Pembroke) becomes Minister of Transportation. Hon. Jim Wilson (Simcoe—Grey) Minister of Economic Development, Job Creation and Trade
Nuclear Refurbishment support Of 72 Ontario ridings (2018) polled this year, all had support levels greater than 65%.
53 Decided Support for Refurb: Overall support up three points to 81%; ‘strongly support’ up 3 points month-to-month Many large power-generating plants in Ontario with various fuel sources will have to be replaced over the next 10 Q years or so because they are aging. In Ontario 80% of the plants will have to be replaced. In order to help meet Ontario future electricity demand, would you strongly support, somewhat support, somewhat oppose or strongly oppose upgrading and refurbishing existing nuclear power plants?
Bruce Power has also achieved 85% support for refurbishment in individual polls done in December, 2015; March 2017 and May, 2018
Note: Data collection was suspended between Apr ‘17 – Jul ’17. The results have been re-calculated to exclude “don’t know”. “Don’t know”: Apr ‘18 (8%); Mar ’18 (15%); Feb ‘18 (13%); Jan ‘18 (11%); Dec ‘17 (13%); Nov ‘17 (9%); Oct ‘17 (12%); Sep ’17 (10%); Aug ‘17 (9%); Mar ‘17 (10%); Feb ‘17 (12%); Jan ’17 (11%); Dec ’16 (10%); Nov ‘16 (10%); Oct ’16 (12%); Sep ’16 (9%); Aug ’16 (10%); Jul ’16 (11%); Jun ’16 (15%); May ‘16 (12%); Apr ’16 (13%); Mar ‘16 (11%); Feb ‘16 (19%); Jan ‘16 (15%); Dec ‘15 (11%); Nov ‘15 (12%); Oct ‘15 (15%); Sep ‘15 (11%); Aug’ 15 (15%); July ‘15 (19%); July ‘15 (14%); May ‘15 (12%); Apr ’15 (13%); Mar ‘15 (5%); Feb ‘15 (12%); Jan ‘15 (11%); Dec’ 14 (7%); Nov ‘14 (8%) Pay Now or Later: A majority (60%) would prefer to pay more now for a firm cost in the future
Q When thinking about keeping up with Ontario’s increasing demand for electricity, there are different options to consider, and there are cost implications depending on the cost of generation and fuel costs. Generally speaking, which of the following statements is closest to your view? [asked of all respondents]
Note: Refused not shown. Pay Now or Later – Nuclear or Gas: Nearly half prefer paying more for nuclear now for stable costs in the future
Q There is a controversy over whether it is better to build more natural gas plants or refurbish existing nuclear plants. Natural gas is cheaper than nuclear energy, but the cost varies over time. Nuclear costs more today, but these costs will be stable over time. With that in mind, which of the following statements is closest to your view? [asked of all respondents]
Note: Refused not shown. Support for Refurbishment & Cost: Net support low for 10% increase to electricity bill and decreases with higher bill costs Upgrading and refurbishing existing nuclear power plants may result in an increase in Q electricity prices. Net ‘Agree’ [each question asked of one third of sample, n= approx..200]
+4%
-11%
-13%
Note: Refused not shown. Effect of Bill Impact: Net support drops significantly from when prompted with bill increase Support for Refurbishment before and after being primed with bill increase Net ‘Support’
+56%
-7%
Note: “Neither support nor oppose” was not given in the question when bill increase was not primed Medical Benefits: Both statements regarding medical benefits increase support for nuclear I am going to read you a couple of statements regarding Ontario’s Bruce nuclear Q power plant, which is located in Kincardine. For each one, I’d like you to tell me if it leaves you more likely to support or oppose nuclear as a way of producing energy. If it makes no difference, please say so. [asked of all respondents] Net Support
+59%
+53% Takeaways
• Collectively, we need to recognize we can’t take anything for granted. Fossil fuels, renewables all want a piece of our role • Everyday, we need to focus on getting our message out and aligning it with MPP’s, MP’s and localizing the impact • We need to take every opportunity to tell our story – based on key planks of low-cost, jobs, innovation and medical isotopes • ONA is building an emailing list of our key supporters that we can mobilize in a highly political environment • Significant provincial government activity over the next three months including the roll-out of third party reports – OCC, CME • Move away from messages around overall investment numbers/spend and move toward messages around jobs, work getting done, innovation and efficiency
Questions? Lunch and the Afternoon
• Lunch • Golf • Event Wrap-up with the CEO
Confidential 62